Fischer v. First Am. Title Ins. Co.
| Decision Date | 29 January 2013 |
| Docket Number | No. WD 74633.,WD 74633. |
| Citation | 388 S.W.3d 181 |
| Parties | Ryan J. FISCHER, Appellant, v. FIRST AMERICAN TITLE INSURANCE COMPANY, Respondent. |
| Court | Missouri Court of Appeals |
OPINION TEXT STARTS HERE
Vincent F. O'Flaherty and Courtney E. Noll, Kansas City, MO, for Appellant.
William L. Sauerwein and Grant J. Mabie, St. Louis, MO, for Respondent.
Before Division II: JOSEPH M. ELLIS, Presiding Judge, and ALOK AHUJA and MARK D. PFEIFFER, Judges.
A jury found in favor of Ryan J. Fischer (“Fischer”) on his claims against First American Title Insurance Co. (“First American”) for breach of the contractual terms of a title insurance policy and on his derivative claim for vexatious refusal to pay. First American filed a motion for a judgment notwithstanding the verdict, which was granted by the Circuit Court of Jackson County, Missouri. Fischer appeals.
We affirm.
Fischer bought a house at 2141 Belleview Avenue, in Kansas City, Missouri. The house located at 2141 Belleview was situated on Lots 9 and 10 in Block 1 of Thayer's Addition (“Lots 9 and 10”). In 2009, Fischer bought a house at 2139 Belleview Avenue, which was located on Lot 8 (“Lot 8”), adjacent to Lot 9, also in Block 1 of Thayer's Addition.
Fischer purchased title insurance for Lot 8 from First American (“the Title Policy”). The Title Policy covered any loss or damage for any “defect in or lien or encumbrance on the Title” to Lot 8, subject to the exceptions from coverage, which were listed in Schedule B.
In pertinent part, the Schedule B exceptions to the Title Policy exclude coverage for losses or damages that arise by reason of “[r]ights or claims of parties in possession not shown by the Public Record” (“parties in possession exception”).
Fischer's plan for Lot 8 was to tear down the existing structures on Lot 8 and build a pool. As part of the project, Fischer tore down a chain link fence that had been built near the northern edge of Lot 8, which was closest to the boundary line of Lot 7—owned by Teresa Rivera (“Rivera”). Fischer then hired a surveyor to mark the boundary lines of Lot 8, and the results of that survey suggested that the fence had been located approximately 3 feet and 7 inches inside the property line boundary for Lot 8 (“the Disputed Parcel”).
The fence was originally built in 1952 and was made of wood. Subsequently, Banks Stevenson, owner of Lot 8 at the time, converted the wood fence to a chain link fence, and he used the fence to grow grapevines.1
Rivera's grandparents owned Lot 7 beginning in the 1940s. Rivera's father owned Lot 7 from 1958 until deeding Lot 7 to his daughter, Rivera, in 1992. Rivera's father used the Disputed Parcel for “picnics and family gatherings” and mowed the Disputed Parcel. After Rivera acquired Lot 7 from her father, she would later testify in a separate lawsuit that she continued to visibly and openly possess, control, and use the Disputed Parcel in like fashion as her father had done at all times prior to Fischer's purchase of Lot 8.
In the summer of 2009, Fischer began excavation for the pool and buried utility lines on Lot 8, including the Disputed Parcel.
In October 2009, Rivera filed a two-count petition against Fischer, asserting adverse possession and boundary by acquiescence claims relating to the Disputed Parcel (“the Rivera lawsuit”). Fischer tendered the defense of the Rivera lawsuit to First American and, in the event that he lost, to indemnify him under the Title Policy. First American rejected the tendered defense of the Rivera lawsuit, citing the parties in possession exception. Fischer then provided First American photos of the chain link fence on Lot 8 that were taken prior in time to him tearing the fence down and again tendered the defense of the Rivera lawsuit to First American. First American again rejected the tendered defense for, among other reasons, the parties in possession exception.
Fischer retained legal counsel and incurred legal fees in excess of $46,000 unsuccessfully defending the Rivera lawsuit.2
Based on First American's refusal to defend Fischer in the Rivera suit, Fischer brought the present lawsuit against First American. Fischer's petition made two claims: (1) that First American breached the contractual terms of the Title Policy by failing to defend and indemnify him in the Rivera lawsuit, and (2) that First American was vexatious in its refusal to defend and indemnify Fischer. The case proceeded to a jury trial in the Circuit Court of Jackson County, Missouri (“trial court”).
The jury entered judgment in Fischer's favor, awarding him $57,971.71 on his breach of insurance policy claim and $24,000 on his vexatious refusal to pay claim. First American filed a motion for a judgment notwithstanding the verdict (“JNOV”).
The trial court granted First American's JNOV motion. In so doing, the trial court explained:
For Count I of his Petition, [Fischer] pleaded a written contract for title insurance with [First American] that he alleged should have entitled him to a legal defense of, and indemnification against, any judgment awarded in an underlying lawsuit styled Rivera v. Fischer then pending in the Jackson County Circuit Court as No. 0916–CV35127. However, the First Amended Petition in the underlying case, the Title Policy language, and information known by [First American] at the time coverage was denied, showed clearly that the pleaded claims in the underlying case were within the language of an unambiguous exception to coverage under the Title Policy because the plaintiff in the underlying case, [Teresa] Rivera, asserted an adverse title because of matters not in the Public Record. Thus Count I fails. Count II is dependent on Count I and therefore also fails.
The trial court vacated the jury's verdict and entered judgment in First American's favor.
Fischer appeals.
We review the trial court's grant of a JNOV motion in favor of the defendant de novo and will determine whether the plaintiff made a submissible case. Koppe v. Campbell, 318 S.W.3d 233, 239 (Mo.App. W.D.2010). “To make a submissible case, a plaintiff must present substantial evidence that tends to prove the facts essential to plaintiff's recovery.” Id. (internal quotation omitted). Evidence is viewed in a light most favorable to the jury's verdict, and the reviewing court must give the prevailing party all reasonable inferences from the verdict. Id. However, the interpretation of an insurance policy, as with any other contract, “is generally a question of law, particularly in reference to the question of coverage.” D.R. Sherry Constr., Ltd. v. Am. Fam. Mut. Ins. Co., 316 S.W.3d 899, 902 (Mo. banc 2010). Further, “[t]he issue of coverage becomes a jury question only when the court determines that the contract is ambiguous and that there exists a genuine factual dispute regarding the intent of the parties.” Id. “[W]e will affirm the trial court's [JNOV] ruling if the trial court's ruling was proper for any reason, even if its assigned grounds were wrong.” Koppe, 318 S.W.3d at 240 (internal quotation omitted).
In his first point, Fischer argues that the trial court erred in granting First American's JNOV motion because he had established a prima facie case for breach of the Title Policy and it was a question of fact whether the parties in possession exception applied.
The Title Policy covers claims for “[a]ny defect in or lien or encumbrance on the [insured's] title.” In the Rivera lawsuit, Rivera claimed she had ownership rights to the Disputed Parcel on Fischer's property, which would be a defect or encumbrance on his title to Lot 8. While the insured bears the burden of proving coverage under an insurance policy, Truck Ins. Exch. v. Prairie Framing, LLC, 162 S.W.3d 64, 80 (Mo.App. W.D.2005), First American does not dispute that Rivera's Disputed Parcel ownership claim falls under coverage of the Title Policy were it not for the exceptions to coverage. The dispute lies in whether the Rivera lawsuit claims fall within an exception to coverage under the Title Policy. The insurer bears the burden of proving the applicability of its policy exclusion. Id. at 80. The Title Policy's parties in possession exception to coverage states:
This policy does not insure against loss or damage, and [First American] will not pay costs, attorney's fees or expenses that arise by reason of ... [r]ights or claims of parties in possession not shown by the Public Record.
Fischer argues that the parties in possession exception is ambiguous because it fails to define “parties in possession,” and the issue was thus properly submitted to the jury. However, “[t]he failure of a policy to define a term does not, in and of itself, render it ambiguous.” Trainwreck W. Inc. v. Burlington Ins. Co., 235 S.W.3d 33, 40 (Mo.App. E.D.2007). “ ‘An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language in the [contract].’ ” Vest v. Kansas City Homes, L.L.C., 288 S.W.3d 304, 310 (Mo.App. W.D.2009) (quoting Gulf Ins. Co. v. Noble Broad., 936 S.W.2d 810, 814 (Mo. banc 1997)). “[W]hen a policy does not define a term, a court is free to give the term a reasonable construction.” Dibben v. Shelter Ins. Co., 261 S.W.3d 553, 557 (Mo.App. W.D.2008). In so doing, “the trial court must consider the whole document and the natural and ordinary meaning of the language.” Maritz Holdings, Inc. v. Fed. Ins. Co., 298 S.W.3d 92, 99 (Mo.App. E.D.2009).
Though no Missouri case has previously discussed the “party in possession” exception, we have not found case precedent—nor has Fischer cited us to any such precedent—concluding that this policy exception to coverage is ambiguous. To the contrary, there are numerous cases across the country and treatises that...
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